Bitcoin is headed for holiday volatility when 100,000 BTC options expire this Friday

The Bitcoin futures market has a significant expiration date of December 25.

In a tweet on Monday, the crypto-currency data provider, Skew, reported that 102,200 Bitcoin options will expire on Dec. 25.

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Option contracts allow their holders to buy or sell Bitcoin at a specific price, which is known as the strike price. The December 25 expiration has notable clusters around the strike price of $15,000 and the exercise price of $20,000, according to Skew.

Expiration dates for BTC options, according to Skew

The expiration date of Bitcoin option contracts is widely considered to be a volatile event for the flagship crypto currency because, as the expiration approaches, holders adjust their contracts. Traders who make a profit can also decide to get paid and lower the price of the krypton currency.

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BTC options expiring on December 25 by exercise price, according to Skew

Such events are known to cause large fluctuations in the Bitcoin value. Usually, the impact of a contract on the BTC price becomes more evident approximately one or two days before expiration.

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Crypto-derivative trading has soared this year as more traders and institutional investors seek additional exposure to Bitcoin. Last week, the crypto-derivatives platform, Deribit, began offering Bitcoin futures with an exercise price of USD 100,000 that expires on September 24, 2021. In other words, Bitcoin enthusiasts who think that cryptomone currency will reach a six-figure level can now take that bet in the futures market. .

Bitcoin is currently in the midst of a bull market that’s being driven in part by institutional investors and large off-market trades. Even with the anticipated volatility of futures, there’s a good chance that Bitcoin will remain well supported by institutional demand and the rise of so-called „illiquid wallets“ – addresses that have sent less than 25% of the BTCs they’ve ever received. Chainanalysis believes that illiquid wallets contain 77% of the 14.8 million mined BTCs that have not been lost.

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Approximately USD 2.3 billion in Bitcoin futures (BTC) will expire on Christmas Day, setting the stage for a volatile week in the crypto market.